It is likely that the federal government could operate on the revenues produced by a simple transaction tax of far less than five percent on the movement of all money. As a result, the payment of taxes would shift from individuals and small businesses to large corporations, and from the laboring poor to the wealthy elite.
Envision the effect of a slight touch every time money moves, a tiny ka-ching in the U.S. Treasury's cash register, which in the aggregate could quickly add up to trillions of dollars each year. How nice it would be to have Congress to first decide what the People of the United States need from their government and to then calculate what the toll tax rate should be to produce the revenue required to pay for it. The result would be significant; public debt could be eliminated, and the United States could finally achieve a balanced budget every year.
Imagine that most people would only have to pay an annual tax rate of a few percent on their spending (income). Of course, the transaction tax would result in a small increase in the overall cost of the goods and services people purchase; however, the toll would apply to all financial transactions, including the purchase of limousines, helicopters, and mansions by the wealthy--who rely on every imaginable scheme to avoid having any "income" upon which to pay taxes.
Those who enjoy luxuries would pay more for them, and those who gamble in the money markets would have to pay for their visit to the economic casino.
In a regulatory sense, a universal financial toll tax would operate somewhat like the income tax in that individuals and corporations would have to prepare an annual tax report, rather than as a sales tax where the revenue is collected at the point of purchase. For most individuals, small businesses, and corporations, the preparation of tax returns would be greatly simplified.
A transaction tax was believed to pose impossible accounting problems when first proposed by James Tobin 40 years ago; however, computer technology now allows for the instantaneous calculation and posting of all financial transactions. Just as the income tax contributions of workers are withheld from their payroll checks every week, it should be possible for the tax on corporate financial transactions be paid every single day at the close of business.
The People do not have to willing endure corrupt government and unfair taxation. Those who pay the taxes must make the essential decisions about the methods of taxation and the level of payment. Otherwise, the People live in slavery and any freedoms are illusionary.
William John Cox is a retired public interest lawyer. His book, "Transforming America: A Voters' Bill of Rights" presents the United States Voters' Rights Amendment, a comprehensive Amendment intended to ensure the right of every citizen to cast effective votes.
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